07 Feb Collections, a headache that wastes time and money
- These types of measures economically affect sellers with Vendor accounts who breach some point of their agreement with Amazon.
- Unlike chargebacks, which are for non-compliance with service policies and standards, surcharges are most often related to problems with the amount sent and received.
On other occasions we have talked about what chargebacks are and how they can be a problem for you at the end of the month to the point of making it unprofitable for you to sell on Amazon. These are penalties that you are given for failing to comply with the mandatory policies to have a Vendor account, such as when the ASN is not valid, when you do not properly prepare the products to be shipped, that the packaging is not correctly labeled, etc. In short, they are a series of actions that you have to carry out in order to be an Amazon supplier and for which they charge you money by having to do them in their warehouses.
On the other hand, recoveries, also known as claims, are financial penalties for having breached the contract you sign with Amazon to supply it with certain products.
Do you want to know what they are and what you can do to claim your money? Read on.
What is a collection?
As we have just pointed out, a recovery is a financial penalty for breach of contract. To be more exact, it is more like a discount than a fine, because they are directly discounted in the payment that Amazon makes to you. This is precisely what differentiates them from chargebacks, as these are applied directly to the collection to Amazon.
There are three different cases:
- Total uncollectible: This means that you haven’t been paid anything on your invoice, i.e. the due date arrives and Amazon decides not to pay you. This occurs when, according to them, none of the goods have arrived.
- Short Claim: these are the most common. These are discounts for undelivered quantities, that is, you send the goods but Amazon, when it arrives at its warehouses, tells you that not everything is agreed and deducts the money corresponding to that amount.
- Price Claim: This is a discount that you get for discrepancies in the price. For example, an order that you invoice at €1,100 normally, with Amazon you agree at €000, but when it comes to making the invoice you get confused and keep the €1,100. In this case, this is what usually happens and Amazon only pays you what was agreed.
Why do collections occur?
The first thing you need to know is that when working with Amazon, these types of collections are very common and can occur due to multiple factors:
- Catalog configuration error: occurs if, for example, you agree that your products are going to go in boxes of four units and finally you send boxes of six. They will deduct the remaining two units since they did not have them and were not agreed.
- Human error: This is the most common case. When an order arrives at the warehouses, Amazon workers must scan each product and it is quite common and normal for something to miss or to fail to count.
- Label error: If an order arrives without a label, or if that label has incomplete information, it can make Amazon think that you didn’t ship all of the merchandise.
- Courier errors: it can also happen that in the course between your warehouse and those of Amazon, some part of the merchandise is lost.
There is no way to prevent this type of incident because many times they are human errors that do not depend on you. The only thing you can do is be cautious and meticulous with all the procedures you have to carry out with Amazon, in addition to trying to make all the orders you deliver to their warehouses as simple as possible to process.
Where and how can recoveries be claimed?
To see how many and what type of collections you have, access the “payments” section from Vendor Central, then click on “invoices” and select the option “review and view undelivered amounts”. In this section, you will see a list of all the orders, as well as the due date of the invoice, the type of collection that has been applied to you and its status.
To claim each one you have to go invoice by invoice, that is, you cannot group several and make a collective claim. To do this, in the same tab of Vendor Central, click on available actions and a message will appear “dispute undelivered amounts”. Next, you have to indicate what you want to claim (units, products…) and say when the shipment took place. In addition, it allows you to give them an explanation of why the surcharge they have applied to you is not valid and accompany it with all the files that support your defense, such as proof of delivery to Amazon warehouses.
There is no stipulated time for the resolution of each case, although normally the process can range from 1 to 30 days. In addition, it is something with which you have to be very insistent, because even though Amazon may deny your claim in the first instance, you can continue to insist until you win the dispute (as long as you are right, of course).
This is a very arduous and tedious task, and in many cases requires quite a lot of time and staff to be able to manage all the disputes. At Nozama our specialized team, on average, can carry out about 10 disputes for each case, since many times you have to make direct contact with Amazon.
At Nozama Solutions we can help you deal with these types of incidents that waste time and money so that you can focus on what really matters: that your business thrives and evolves.